|Sales & Marketing|
|Costs & Contract|
|Complaints & Service|
UPDATED 1/19/16: The Apex Merchant Group website (apexmg.net) is not currently active and appears to have been inactive since late 2015. It’s possible that Apex is no longer an active brand, or that it has been absorbed into another entity under the First American Payment Systems umbrella. We are unable to determine whether Andrew, Craig, and Jonathan Frankel have launched any merchant services companies to replace Apex Merchant Group; if you have any knowledge of the company’s fate, please share that information in the comment section below.
Apex Merchant Group (apexmg.net) is a merchant account provider based in Plano, Texas, and the company looks to have been established in 2008 or 2009. Apex Merchant Group is a reseller of First American Payment Systems contracts, making it a member of the First American ISO network that appears to consist of the following companies: Appstar Financial, Eliot Management Group, Trans Tech Merchant Group, Summit Merchant Solutions, and Certified Payment Processing. Apex Merchant Group is an ISO/MSP of Fifth Third Bank, Cincinnati, Ohio. The company’s corporate headquarters is located at 6652 Pinecrest Dr., Suite #400, Plano, Texas 75024.
On October 15, 2014, the Attorney General of Minnesota filed a lawsuit against Apex Merchant Group alleging that the company fraudulently altered contract terms and used “bait and switch” tactics to trick merchants into paying higher rates than they had initially agreed to. The lawsuit was settled in March 2015. Per the settlement’s conditions, Apex paid a settlement sum of $550,000. In addition, Apex, Andrew Frankel, and Arthur Banks agreed to abstain from selling merchant services in the state of Minnesota for six years and to release existing Minnesota Apex merchants from their contracts without cancellation penalties.
The CEO of Apex Merchant Group, Andrew Frankel, is the brother of Craig Frankel. Craig and Jonathan Frankel formerly served as officers and directors of Certified Merchant Services, which was the subject of an FTC complaint in 2002. In that complaint, Certified Merchant Services was accused of modifying customer contracts, debiting accounts without authorization, misrepresenting the goods and services offered by the company, and failing to disclose various fees. Certified Merchant Services settled that complaint for $23.5 million. According to the Attorney General of the State of Minnesota, Craig Frankel is an investor in Apex Merchant Group.
Following the FTC litigation and the subsequent sale of Certified Merchant Services, Craig Frankel released a book and served as the executive producer of a film titled Chasing the Green, which tells the story of “two young brothers who become millionaires during the early 1990s. Their ambition and drive lead them into conflict with FTC officials, where an over-zealous bureaucrat attempts to destroy their company.” The Amazon book description also states that the brothers in the story (the “Franklins”) “were confident and bold, and thus ignored warnings by the government to ‘respond’ to numerous complaints regarding their practices. Ultimately, they were nearly destroyed by the FTC, who sought to demolish their company at the behest of their competitors in the industry.” This version of events—in which two reckless, money-hungry brothers fall victim to unreasonable federal regulators acting at the urging of jealous rivals—suggests a great deal about how Craig Frankel interprets his actions, his brother’s actions, and the FTC’s actions.
Chasing the Green Trailer
|Apex Financial Products and Services||Industries Served|
|Key Points – Sales & Marketing|
|Uses independent resellers?||Yes|
|Promotes deceptive rate quotes?||No|
|Discloses all important terms?||No|
Apex appears to rely primarily on recruiting and hiring independently contracted agents to market and sell its financial services as well as “appointment setting” via telephone. Based on several reports, many of these agents engage in telemarketing and door-to-door sales. Numerous complaints suggest that agents receive poor training regarding the terms and conditions of Apex’s merchant account agreement and that commissions are tied to the cost of the merchant account. This means that the more expensive the rates and fees are set for the merchant during the setup process, the larger the commission the agent receives.
At minimum, it is apparent that the company has a lack of oversight of its agents as evidenced by the plentiful reports of deceptive sales tactics. At worst, the claims by the Minnesota Attorney General’s office suggest that some Apex agents have intentionally altered contract terms and used bait-and-switch methods to trick merchants into signing unfavorable contracts. Additionally, Apex appears to often enforce predatory agreements even when the merchant claims that an agent lied about its conditions or failed to verbally disclose them.
Apex Merchant Group Marketing Example
|Key Points – Costs & Contract Terms|
|PCI compliance fee:||$125/year|
The total cost of an Apex merchant account will likely vary based on a merchant’s business type and the agent setting up the account. Numerous merchants indicate that agents often overprice the rates and fees and that the accounts often end up more expensive than what merchants were quoted. In addition, the company charges an annual PCI Compliance fee of $125.
Apex’s standard contract (available below) includes a three-year service agreement with automatic renewal for one-year terms, an Early Termination Fee (ETF) of $495 or more, a $95 annual fee, and an unlisted monthly minimum fee. These fees are automatically debited from merchants’ attached checking accounts. Merchants who choose to lease equipment may be subject to additional fees and conditions, including non-cancellable long-term leases. See the Apex Merchant Group Terms & Conditions.
|Key Points – Complaints & Service|
|Live customer support:||Yes|
|Most common complaint:||Hidden fees|
We are currently able to locate over 120 Apex Merchant Group complaints, many of which describe the company as a ripoff or a scam. This is a high number of complaints for a provider of its size and time in business, and these complaints come from both former agents and merchant customers. Agents mostly report misleading job opportunities that promise great pay and high-quality appointments set by the company. However, most of these complaints state that the appointments are usually of poor quality and that merchants often are not expecting their arrival. Due to this, several agents reported costs in travel that were never recovered because they were unable to complete sales at their appointments.
Merchant complaints primarily consist of reports of unauthorized debits from checking accounts, deceptive sales tactics by agents, “hidden” fees, poor customer service, difficulty closing accounts, and nondisclosure of important fees, terms, and conditions prior to an agent setting up an account.
|Key Points – BBB Report|
As of this review, the Better Business Bureau is reporting a “F” rating for Apex Merchant Group based on 125 complaints filed in the last 36 months. Of the total, 72 are regarding problems with products and services, 33 with advertising and sales issues, and 20 with billing and collection disputes. Apex has resolved 23 of the complaints to the merchant’s satisfaction, while 76 if complaints either were resolved to the merchant’s dissatisfaction or did not receive a final response from the merchant. Another 25 complaints didn’t receive a good faith response from Apex, and one complaint went completely unaddressed. The BBB also notes the government action against the company. We see no reason to adjust the BBB’s grade at this time.
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This review was originally published on 9/27/12 and was last updated on 2/19/16.
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